Public Records Stonewalling About Cryptocurrency In Fairfax County Virginia Pensions

By admin On Jan 18, 2023

Getting the truth about cryptocurrency gambling at public pensions is no simple task.

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In response to public concerns, the McLean Citizens Association will host a virtual Public Informational Meeting to discuss two of the three Fairfax County Virginia pension funds’ cryptocurrency-related investments tomorrow. Fairfax County’s Retirement Systems Executive Director Jeff Weiler, who has publicly stated that cryptocurrency is “no different from any other investment” and the Chief Investment Officers of the Employees’ Retirement System (Andrew Spellar) and the Police Officers Retirement System (Katherine Molnar), both of whom have advocated for cryptocurrency investing will discuss their views. For whatever reason, the Chief Investment Officer of the third pension, the Uniformed Employees Retirement System (Brian Morales), who openly opposes crypto investing by public pensions—in Fairfax County and beyond—will not be participating in the virtual meeting or sharing his opinions. Registration is supposedly open to everyone. Most disturbing, the public will be unable to verify any representations made at the public informational meeting regarding the nature and extent of crypto-holdings by the Fairfax County pensions since, despite outstanding public record requests for documents, no crypto documents have been released to the public. So much for transparency and public accountability in Fairfax County Virginia.

America’s state and local pensions are supposed to be the most transparency in the world. After all, trillions of public dollars are held in these largely unregulated investment funds and every state has established freedom of information act laws designed to ensure public accountability. Unfortunately, as I discuss in my bestselling book, Who Stole My Pension? public pensions have become very adept at circumventing state public records laws and stonewalling. I regularly encourage public pension stakeholders to request documents regarding their state and local pension’s investments and witness the hostile response they get. Bear in mind, while there is nothing to prevent public pensions from meeting and even exceeding the minimal requirements of their state’s public records laws—i.e., providing the public with enhanced transparency—all public pensions I have ever investigated refuse to provide even minimal information until forced to do so through litigation.

While we can rail forever about the lack of transparency at public pensions, a real-life example perhaps best illustrates the problem. Below is a verbatim record of my unsuccessful efforts since early December to obtain records from Fairfax County regarding the crypto-holdings of its three pensions. As you can see, initially I was told the pension had no obligation to respond to inquiries from non-Virginia residents or media representatives unless the publication could show circulation in Virginia. After I told the county representative, “If you have something called the internet in Virginia, then I’m sure Forbes.com has circulation in your state,” the county agreed to begin to process my request. To date, all I have received is a worthless single-page heavily redacted document.

_________________________

Dear Sirs,

With respect to the Uniformed Retirement System, please disclose any direct or indirect investments, including through funds managed by external fund managers, in any of the following categories as it relates to digital assets:

Automated market makers (AMM); Centralized exchanges (CEX); Convertible virtual currencies (“CVC”); CVC funds and ETFs; CVC indices; Decentralized autonomous organizations (DAOs); Decentralized exchanges (DEX); Decentralized finance (DeFi); Derivatives; Ecosystems; Governance tokens; Hedge funds; Identity management; Lending and borrowing; Metaverse; Mining (all kinds); NFTs and collectibles; Options; Oracles; Private equity; Portfolio management; Real estate; Staking; Stablecoins; Tokenized commodities; Tokenized securities; Utility tokens; Venture; Wallet providers; Wrapped tokens; Yield farming.

Edward Siedle

_________________________________

Sent: Fri, Dec 9, 2022 3:40 pm

Subject: Re: Forbes article VFOIA-70391

Mr. Siedle,

My name is Jennifer Snyder and I’m the FOIA coordinator for Fairfax County’s Retirement Systems. Retirement has received your request for records today, December 9, 2022 and has assigned it reference number VFOIA-70391. A copy is also attached.

Please be advised that pursuant to Va. Code § 2.2-3704(A), citizens of the Commonwealth of Virginia, representatives of newspapers and magazines with circulation in the Commonwealth, and representatives of radio and television stations broadcasting in or into the Commonwealth are granted access to public records in the custody of Fairfax County Government. As such, pursuant to Va. Code § 2.2-3704(A), Fairfax County is requiring you to provide your legal address. Please provide evidence of your Virginia state residency at your earliest convenience.

Thanks so much,

Jennifer Snyder

________________________________

From: Edward Siedle

Sent: Friday, December 9, 2022 4:21 PM

To: Snyder, Jennifer <Jennifer.Snyder@fairfaxcounty.gov>

Subject: Re: Forbes article VFOIA-70391

Please be advised that Forbes magazine and Forbes.com both have circulation in Virginia.

Nevertheless, you indicated to me today that even if I were a Virginia resident (or the magazine I write for had requisite circulation in VA), the information I requested would not be publicly disclosed because in 2018 the County agreed with Wall Street fund managers that all information related to their underlying portfolio investment holdings constituted trade secrets exempt from public disclosure.

Finally, you represented to me today that the Uniform pension has absolutely none of the digital assets I have listed below, directly or indirectly, in its portfolio. You indicated you have actually reviewed the holdings of all the funds in which the Uniform pension has invested and are confident there are no direct or indirect digital holdings. Please confirm all of the above.

Have a nice weekend.

Ted Siedle

______________________________________

To: Edward siedle

Sent: Fri, Dec 9, 2022 5:04 pm

Subject: RE: Forbes article VFOIA-70391

Fully denied, no confirmation given.

Please allow me to clarify.

I said in 2018 Fairfax Retirement Agency adopted and implemented VA-FOIA procedures handed down to agencies from the Fairfax County FOIA agency.

Step 1 is to complete the requisite that we follow our FOIA procedures for “citizens of the Commonwealth of Virginia, representatives of newspapers and magazines with circulation in the Commonwealth, and representatives of radio and television stations broadcasting in or into the Commonwealth.”

I have reviewed your article Ohio Teachers Pension Has No Comment Or Records Regarding Its Cryptocurrency Investments (forbes.com) and validate that you are a representative of a [digital] magazine with circulation in VA. Thank you for confirming.

I also advised of a step 2, which I will do now:

Fairfax County may assess reasonable charges not to exceed its actual cost incurred in accessing, duplicating, supplying, searching for requested records, or developing a cost estimate. If you would like a cost estimate, please let us know promptly before we provide a response to your request. Please note if we do not hear from you promptly, we will continue to process your request, and you may be responsible for any charges incurred.

I am going to waive the cost and estimates at this time. Should you wish to continue with a request under VFOIA-70391, I will provide a cost estimate.

I am waiving costs associated with this request, at this time, because:

Please be advised that VFOIA “applies to requests for public records, not requests for information or for answers to questions.” VFOIA Advisory Council Op. AO-06-05 (May 31, 2005). To that end, if this were a request cognizable under VFOIA, because it is a request for information rather than one seeking public records, no response is required.

As always, please feel free to reach back out to me for additional assistance. In the meantime, some public records for the Fairfax County Uniformed Retirement System may be found on our website here: Financial Publications | Retirement Systems (fairfaxcounty.gov).

Thanks,

Jennifer Snyder

__________________________________________

From: Edward siedle

To: Jennifer.Snyder@fairfaxcounty.gov <Jennifer.Snyder@fairfaxcounty.gov>

Sent: Tue, Dec 13, 2022 2:04 pm

Subject: Re: Forbes article VFOIA-70391

Well, Jennifer, here’s my revised request.

With respect to the Uniformed Retirement System, please provide any documents related to any direct or indirect investments, including through funds managed by external fund managers, in any of the following categories as it relates to digital assets:

Edward Siedle

____________________________

From: Edward siedle

Sent: Monday, December 19, 2022 3:39 PM

To: Snyder, Jennifer <Jennifer.Snyder@fairfaxcounty.gov>

Subject: Fwd: Forbes article VFOIA-70391

Jennifer,

Please confirm receipt of my revised request below. Also, please confirm that with respect to the Employees pension fund, direct and indirect investments in cryptocurrency and related companies in the past exceeded 10% of the portfolio, inclusive of committed capital and that such investments in the Police pension exceeded 13% in the past—prior to any markdowns of crypto assets. Finally, please confirm that such investments in the Uniform plan amount to at least $190,000, based upon only those external managers that have responded to inquiries by the plan. With respect to any external managers that have not agreed to disclose cryptocurrency assets, the amounts are unknown.

Thank you.

Edward Siedle

__________________________________

From: Snyder, Jennifer <Jennifer.Snyder@fairfaxcounty.gov>

To: Edward siedle <esiedle@aol.com>

Cc: Morales, Brian <Brian.Morales@fairfaxcounty.gov>; Spellar, Andrew <Andrew.Spellar@fairfaxcounty.gov>; Molnar, Katherine <Katherine.Molnar@fairfaxcounty.gov>

Sent: Mon, Dec 19, 2022 4:03 pm

Subject: RE: Forbes article VFOIA-70391

Dear Mr. Siedle,

I confirm receipt of the revised request on 12/13/2022. On 12/14/2022 I provided the revised request to the CIO, Brian Morales to begin identifying managers that may have the list of asset categories and where I might find a record responsive to your request.

On Friday, 12/16/2022, I received an email confirmation from Brian Morales:

Jennifer,

I have spoken with Edward Siedle and answered his VFOIA questions to his satisfaction.

Brian Morales

CIO – Fairfax County Uniformed Retirement System

I have since closed VFOIA-70391. Are you stating that the phone conversation was not to your satisfaction? If that is the case, I am happy to reopen the request and do a search for records we may have that might be responsive to your request.

Please remember that VFOIA “applies to requests for public records, not requests for information or for answers to questions.” VFOIA Advisory Council Op. AO-06-05 (May 31, 2005). We do not make confirmations.

Please submit a request for any records for any Retirement Systems not initially referenced under VFOIA-70391.

Once I have a request for public records from you, I will provide a cost and an effort estimate for your review and agreement prior to beginning work.

Thanks,

Jennifer Snyder

____________________________________

From: Andrew Spellar

Sent: December 21, 2022

Mr. Siedle,

To a large extent our hands are tied in that we enter into confidentiality agreements with our managers under provisions within the Virginia FOIA statutes to protect portfolio investments.

I would point you to our website and our Annual Financial Reports which are the public documents of record.

Financial Publications | Retirement Systems (fairfaxcounty.gov)

Additionally, you are free to approach managers with your inquiries directly.

Regards,

Andy

Andrew J. Spellar

Chief Investment Officer

Fairfax County Employees’ System

______________________________________

From: Edward siedle

Sent: Wednesday, December 21, 2022 12:17 PM

To: Snyder, Jennifer <Jennifer.Snyder@fairfaxcounty.gov>

Cc: Morales, Brian <Brian.Morales@fairfaxcounty.gov>; Spellar, Andrew <Andrew.Spellar@fairfaxcounty.gov>; Molnar, Katherine <Katherine.Molnar@fairfaxcounty.gov>

Subject: Re: Forbes article VFOIA-70391

Ms. Snyder,

I have filed a public records request with you, as you have instructed me to do, as opposed to a request for information or for answers to questions (as to which you have advised me you have no obligation to respond— even as a courtesy to major media). To date, I have been provided with no public records. None. I have indeed spoken with Mr. Morales and asked, most recently, that you or he confirm the information he provided to me over the telephone, including the percentages of crypto assets held in the Police, General Employees and Uniform pensions, prior to any markdowns. If you’re not going to provide me with the records requested and ask that I rely solely upon information provided verbally by Mr. Morales, please confirm the accuracy of that information.

Edward Siedle

____________________________________

From: Snyder, Jennifer

Sent: Wednesday, December 21, 2022 5:35 PM

To: Edward siedle

Cc: Morales, Brian <Brian.Morales@fairfaxcounty.gov>; Spellar, Andrew <Andrew.Spellar@fairfaxcounty.gov>; Molnar, Katherine <Katherine.Molnar@fairfaxcounty.gov>

Subject: RE: Forbes article VFOIA-70391

Mr. Siedle,

VFOIA-70391 relates to Fairfax County Uniformed Retirement System. We have not received a request for records from you for the Employees System or Police. I did receive your confirmation of a revised request where you added the Employees’ and Police:

“Also, please confirm that with respect to the Employees pension fund, direct and indirect investments in cryptocurrency and related companies in the past exceeded 10% of the portfolio, inclusive of committed capital and that such investments in the Police pension exceeded 13% in the past—prior to any markdowns of crypto assets.”

This was not a request for public records and was added to an existing, open request. As a courtesy to you, we will open a new request with the same, requested details for the Employees’ and Police Retirement Systems.

Regarding VFOIA-70391, there are 2 documents that, when applied together, may be responsive to your request. I have reviewed our contracted agreement with the investment company and it states we are to provide the company a copy of the request, and responsive documents for their review. They will review the request and documents for proprietary and trade secret exemptions that apply (if any). At the same time, I will have our legal department do the same review. Once all parties are in agreement, we will respond to VFOIA-70391.

Due to the holiday season and my inability to control the time effort of outside parties, I would like to ask for an extension to the 5 business day rule. I will work as diligently as possible through the next 5 business days to get you a response. I will keep you informed as to the work being done by the external parties and ask that you please be flexible if there becomes a need to extend the deadline. Again, I will keep you posted.

I’d like to advise you that the FOIA request for the Uniformed Retirement System happens to be for only 1 investment. Employees and Police potentially have 4-6 investments and will take incrementally more time. More on the additional Retirement Systems after I open the new request and begin the process.

Jennifer Snyder

________________________________________

From: Snyder, Jennifer

Sent: Wednesday, December 28, 2022 11:45 AM

To: edward siedle <esiedle@aol.com>

Cc: Ando, Yuko <Yuko.Ando@fairfaxcounty.gov>

Subject: RE: Forbes article VFOIA-70391 & VFOIA-71027

Mr. Siedle,

Due to staffing shortages through the holiday season, Fairfax County requires an additional seven working days to respond to VFOIA-70391. Va. Code Ann. § 2.2-3704(B)(4). The County will make any responsive records identified available to you 7 working days after today, the first 5 business days after your updated request was received, or any updates that can be provided sooner.

As a courtesy to you, I have created VFOIA-71027 which will encompass your request for Employees’ and Police Officer’s Systems records. At this time, for the same reason stated above, I wish to inform you that VFOIA-71027 will also require an additional 7 working days.

Thank you so much for your interest in Fairfax County’s Retirement Systems.

Hope you are having a wonderful holiday season.

Jennifer Snyder

_________________________________

On Thursday, December 29, 2022, 10:40 AM, Snyder, Jennifer <Jennifer.Snyder@fairfaxcounty.gov> wrote:

Dear Mr. Siedle,

In light of your publication yesterday Fairfax County Virginia Police And Employees Pensions Gamble 13%, 10% In Crypto; Uniformed Pension Not-So-Much? (forbes.com) do you still want us to process your FOIA requests? We are happy to continue to research records that may be responsive, but would like to confirm your desire for us to continue the effort.

Hope to hear from you soon. We stand ready to proceed.

Thank you,

Jennifer Snyder

___________________________________

From: Edward siedle

Sent: Thursday, December 29, 2022 11:29 AM

To: Snyder, Jennifer <Jennifer.Snyder@fairfaxcounty.gov>

Cc: Ando, Yuko <Yuko.Ando@fairfaxcounty.gov>

Subject: Re: Forbes article VFOIA-70391 & VFOIA-71027

Yes. Please do. Thank you and happy new year.

Edward Siedle

_______________________________________

From: Snyder, Jennifer <Jennifer.Snyder@fairfaxcounty.gov>

To: edward siedle

Sent: Thu, Dec 29, 2022 5:03 pm

Subject: VFOIA-71027 Digital Assets Fairfax County Employees’ and Police Retirement Systems

Mr. Siedle,

Thank you for submitting your Virginia Freedom of Information Act (VFOIA) request to Fairfax County Retirement Systems, a copy of which is included below. For your reference, we have assigned it reference number VFOIA-71027.

Fairfax County may assess reasonable charges not to exceed its actual cost incurred in accessing, duplicating, supplying, searching for requested records, or developing a cost estimate. The Fairfax County Employees’ and Police Retirement systems currently have 10 investments (per system, 20 total), each having provided records responsive to your request.

I wish to advise you that these records are subject to contracts with private firms who have acknowledged their understanding of Virginia’s FOIA laws and exemption processes and have either submitted their required exemption materials, or operate under the procedure whereby they’ve agreed to be informed of the request. The investment companies are allowed to review the request, then supply exemption details as the need arises. Under all circumstances, each of the 20 investments’ contractual circumstances and responses must be reviewed by me, due to the varied complexity of the records implicated under the request, and the necessity of having a more senior employee review a portion of the records.

I estimate each review to take 1 hour, for a total of 10 hours (assuming when 2 systems invest in the same fund all language is materially the same). At $57/hour, the total estimated cost to respond to your request is $570.Pursuant to Va. Code Ann. § 2.2-3704(H), the County requires payment prior to processing your VFOIA request because the estimated costs will exceed $200. If you wish to continue with your VFOIA request, please send a check to Fairfax County Retirement systems, C/O Jennifer Snyder in the amount of $570, to the address in my signature block below, made payable to the “County of Fairfax”. To the extent that the actual costs may increase, you will be required to pay any additional costs, and if the actual costs are less than estimated, the County will refund you the difference.

I stand ready to service your request upon your agreement. In the meantime, some of the information you have requested is available online here:

We appreciate your interest in the County’s Retirement Systems and if or when there’s any more we can do, please feel free to reach out to me, referencing the FOIA tracking number above.

Thank you.

______________________________________

From: edward siedle

Sent: Saturday, December 31, 2022 12:31 PM

To: Snyder, Jennifer <Jennifer.Snyder@fairfaxcounty.gov>

Subject: Re: VFOIA-71027 Digital Assets Fairfax County Employees’ and Police Retirement Systems

Ms. Snyder,

Since you have stated you have the discretion to waive any fees, I suggest you do so given the obvious benefits to participants resulting from expert analysis and insights.

Thank you.

Edward Siedle

______________________________________________

Mr. Siedle,

Thank you for your request for a fee waiver for VFOIA-71027. As I mentioned in my prior email, the anticipated cost to search, review, redact, and provide you with responsive records would be at least $570. The County is not willing to waive the anticipated actual allowable costs relating to this FOIA request. In line with Fairfax County’s Countywide FOIA Policy, fee waivers should be considered when the cost is expected to be less than $50.

As you know, I’ve provided you with a fee waiver for another FOIA, which is in progress (VFOIA-70391). The actual allowable costs of that FOIA are well in excess of $100. We will respond to this FOIA as soon as we can and we very much appreciate your patience.

Jennifer Snyder

__________________________________________

January 6, 2023

Mr. Siedle,

A record responsive to your request (VFOIA-70391) is attached. Please be advised that portions of this record are redacted pursuant to Code of Virginia sections 2.2-3705.7(12) and 2.2-3705.1(13) – as marked on the attached record. The second page of the record, containing one paragraph concerning a mix of a private entity’s portfolio companies or properties, is withheld in its entirety pursuant to Virginia Code section 2.2-3705.7(12).

Sincerely,

Jennifer Snyder

________________________

In conclusion, if you are a public pension stakeholder (either a taxpayer or participant) I encourage you to file public records requests for information about management (or mismanagement) of investments. Here’s hoping you’ll have better luck than I’ve ever had.

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